Proceedings of the 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022)

The Impact of Shadow Banking on Small and Medium Enterprise in China - Based on Trust Company Statistics

Authors
Sifan Tao1, Ziyang Lu2, Hanyu Li3, *, , Xingcong Liu4, *, , 1304193331lxc@gmail.com
1Questrom School of Business, Boston University, Boston, Massachusetts, 02115, United States of America
2Beijing-Dublin International College, Beijing University of Technology, Chaoyang District, Beijing, 100020, China
3School of Economics and Management, Beijing Institute of Technology, Beijing, 100081, China
4College of Engineering and Mathematical Science, University of Vermont, Burlington, Vermont, 05405, United States of America
+

They are both Co-Third Author.

*Corresponding author. Email: Hanyu Li - 1120191006@bit.edu.cn
Corresponding Authors
Hanyu Li, Xingcong Liu1304193331lxc@gmail.com
Available Online 26 March 2022.
DOI
10.2991/aebmr.k.220307.183How to use a DOI?
Keywords
Shadow Banking; Small and Medium Enterprise; Trust Companies; Risky Nature
Abstract

With the development of the Chinese economy, small and medium enterprises have made up an essential part of the national GDP. However, the difficulty of financing of SMEs remains unsolved. This paper evaluates the current situation of shadow banking influencing the funding of SMEs in China. This paper starts with introducing SMEs funding and trust companies’ performance, SMEs financing situation during COVID-19 and then examines the chance of survivorship and risky nature of SMEs.

Lastly, a conclusion was made that even though shadow banking could help SMEs resolve their financial difficulty in the short term, however, due to their risky nature and low chance of survivorship, the positive effects of those loans are limited. As a result, the uncertainty poses many risks on nonbank institutions, exacerbating their reluctance to grant loans to SMEs. Therefore, to achieve stable and healthy growth of SMEs, more concrete and suitable funding policies must be endorsed.

This paper has the goal of uncovering the core obstacles SMEs face and finding the possible solutions from variety of perspectives, including government policies, reconstructing companies’ structure, etc. This is done through researching in the field of SMEs’ capital structure and trust companies’ funding mechanism, as well as SMEs’ performances with relation to their funding methods. The importance of this paper ties closely into solving the financing difficulty SMEs in China currently facing, and providing a deeper understanding of current SMEs financing situation in China, lastly providing possible solutions to those difficulties.

Copyright
© 2022 The Authors. Published by Atlantis Press International B.V.
Open Access
This is an open access article under the CC BY-NC license.

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Volume Title
Proceedings of the 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022)
Series
Advances in Economics, Business and Management Research
Publication Date
26 March 2022
ISBN
978-94-6239-554-1
ISSN
2352-5428
DOI
10.2991/aebmr.k.220307.183How to use a DOI?
Copyright
© 2022 The Authors. Published by Atlantis Press International B.V.
Open Access
This is an open access article under the CC BY-NC license.

Cite this article

TY  - CONF
AU  - Sifan Tao
AU  - Ziyang Lu
AU  - Hanyu Li
AU  - Xingcong Liu
PY  - 2022
DA  - 2022/03/26
TI  - The Impact of Shadow Banking on Small and Medium Enterprise in China - Based on Trust Company Statistics
BT  - Proceedings of the 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022)
PB  - Atlantis Press
SP  - 1108
EP  - 1116
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220307.183
DO  - 10.2991/aebmr.k.220307.183
ID  - Tao2022
ER  -